A court in Seoul rejected a request by prosecutors for arrest warrants for eight people associated with Terraform Labs, including Terraform Labs co-founder Daniel Shin, early investors and former engineers.
It’s hard to believe they would flee or destroy evidence, as Shin and the seven other suspects cooperated in the investigation. said Yonhap News, citing the court in Seoul. In addition, the defendants must also be guaranteed their right to defend themselves against the allegations of capital market rules, which the court said is the core charge of this case, according to Yonhap.
The Seoul South District Prosecutor’s Office told ExamPaper it’s hard to understand that conclusion given the court knows the gravity of the allegation and the fact that some of the defendants allegedly made money selling Luna tokens before the collapse. And yet the court rejected the arrest warrants and said the eight people should have the right to defend their case against charges.
Shin is accused of taking illegal profits worth about $105 million by selling Luna tokens when it was near its all-time high, without disclosing this move to investors. It happened before the collapse of the TerraUSD and Luna earlier this year, in violation of the Capital Market Act. Prosecutors also suspect that Shin used customer data from his separate fintech startup Chai to promote Luna in violation of the Electric Financial Transaction Act. The other seven people involved with Terraform also allegedly have similar charges.
Shin has denied allegations of trading Luna at a market high and violating clients’ data. Terraform was founded in Singapore in 2018 by Do Kwon and Shin. Shin left Terraform in March 2020 to found Chai and stepped down as CEO of Chai earlier this year.
South Korean prosecutors began the investigation after the crash of the UST-Luna token earlier this year, which wiped out $40 billion in market value. In September, South Korea issued an arrest warrant for another co-founder, Kwon, whose whereabouts are currently unknown, and requested Interpol, the international law enforcement agency, to issue a red notice for Kwon.
“The Seoul Southern District Court’s Dec. 3 ruling to deny South Korean prosecutors’ requests for detention orders for former Terraform Labs employees once again illustrates the baseless nature of the plaintiff’s allegations,” a spokesperson said. of Terraform Labs in an emailed statement to ExamPaper. “With these allegations behind us, our focus is on building the future of Terra and developing the best ecosystem in Web3 to launch and scale a blockchain.”
Updates with commentary from Terraform Labs spokesperson.